US Senator pushes for Fed IG, slams Fed over bank regulation

US Sen. Scott pushes for a new Fed inspector general, slams Fed over bank regulation WASHINGTON Reuters Republican U.S. Senator Rick Scott said on Monday that he will introduce legislation to create an independent inspector general to oversee the Federal Reserve, as he said that the U.S. central bank was unable or unwilling to regulate banks in a letter to Fed Chair Jerome Powell.

Scott, a Republican who is known for his hardline conservative positions, informed Powell of his plans in a March 20 letter that questioned the U.S. central bank's ability to oversee the banking system after the collapse of Silicon Valley Bank and Signature Bank earlier this month.

Scott told Powell in the letter that he was proposing legislation to establish a Senate-confirmed inspector general for the Federal Reserve. What are your views on accountability? For too long, the Federal Reserve has used its claim of independence to thwart Congress and the American people, while failing to regulate and supervise the large financial institutions under its care, Scott wrote.

There was no immediate response from the Fed.

Scott is expected to introduce the legislation later this week, according to an aide.

After the collapse of Silicon Valley Bank and Signature Bank, Republicans and Democrats in Congress have pledged to tighter oversight of banking regulators.

The Federal Reserve is responsible for overseeing, inspecting and inspecting certain financial institutions to make sure they comply with rules and regulations, and to ensure that they are in a safe and sound manner.

Some lawmakers have criticized the San Francisco Federal Reserve Bank for criticism, including Democratic Senator Elizabeth Warren, who told an interviewer on Sunday that she does not have faith in the bank's president, Mary Daly.

The San Francisco Fed was responsible for the oversight of the Silicon Valley Bank.

Scott's legislation stems from concerns in Congress that the Federal Reserve's current inspector general is not independent enough to serve as a check on the central bank.

Andrew Levin, a former Fed official and an economics professor at Dartmouth, said that when Congress created Inspectors General in the 1970s, the Federal Reserve was a much smaller and less complicated entity.

The Fed was assigned an internal IG that reports directly to the Fed board, rather than a completely independent auditor, like the Pentagon or other big agencies.

Scott urged the Fed chief to use the central bank's policy meeting this week to look at bank failures and identify accountable Fed personnel.

Scott said that the failures and malfeasance of these banks and their regulators should be at the top of the agenda.

Before the meeting ends, it is my expectation that you name the individual who has been fired for these failures, and make clear your support for accountability measures at both the Federal Reserve and our banks.